US 10Y TREASURY: aligning to a Feds cut

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Weaker inflation and economic output data increased investors sentiment of a potential Fed rate cut at December's FOMC meeting. The 10Y US Treasury benchmark yields reacted to these expectations, pushing yields further to the lower side. The 10Y yields started the week around 4,04%, but reached the lowest weekly level at Friday's trading session, at 3,96%. Still, they closed the week at 4,01%.
Although yields are holding around the 4%, still next Friday might bring some higher volatility, as September PCE data are set for a release. This indicator represents Fed's favourite inflation gauge, in which sense, the market might increase its nervousness, in case that posted figures are not in favour of Fed's 25 basis point cut. On the other hand, yields might continue to be in a “silent” mode, around 4%, prior to the FOMC meeting, scheduled in two weeks from now.

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